Standing Committee D

(Part I)

[Mr. Bill O'Brien in the Chair]

Serious Organised Crime and Police Bill

Schedule 1 - The Serious Organised Crime Agency

Amendment proposed [this day]: No. 120, in schedule 1, page 120, line 28, after '9)', insert— 
'(aa) such persons appointed by SOCA under this paragraph as police members of SOCA,'.—[Mr. Andrew Mitchell.] 
Question again proposed, That the amendment be made.

Bill O'Brien: I remind the Committee that with this it is convenient to discuss the following amendments:
No. 121, in schedule 1, page 120, line 36, after first 'SOCA', insert 
'or police members of SOCA'. 
No. 108, in schedule 1, page 122, line 33, at end insert 
 'Police members of staff of SOCA 
 13A A person shall be appointed as a police member of SOCA if— 
(a) he is attested or sworn as a constable and 
(i) he is a member a police force maintained under section 2 of the Police Act 1996; 
(ii) he is a member of the Metropolitan Police Force or City of London Police Force; 
(iii) he is a regular constable within the meaning of the Police (Scotland) Act 1967; 
(iv) he is a member of the Police Service of Northern Ireland; 
(v) he is a member of the Ministry of Defence Police appointed on the nomination of the Secretary of State under section 1 of the Ministry of Defence Police Act 1987; 
(vi) he is a member of the British Transport Police Force; 
(vii) he is a member of the States of Jersey Police Force; 
(viii) he is a member of the salaried Police Force of the island of Guernsey; or 
(ix) he is a member of the Isle of Man Constabulary; 
(b) he is an officer of Revenue and Customs, or 
(c) he is an immigration officer within the meaning of the Immigration Act 1971. 
 13B(1) Subject to the provisions of this paragraph, the Secretary of State may make regulations as to the government and administration of SOCA and conditions of service within SOCA. 
 (2) Without prejudice to the generality of sub-paragraph (1), regulations under this paragraph may make provision with respect to— 
(a) the ranks to be held by police members of SOCA; 
(b) the promotion of police members of SOCA; 
(c) voluntary retirement of the police members of SOCA; 
(d) the efficiency and effectiveness of police members of SOCA; 
(e) the suspension of police members of SOCA from membership of it and from their office as constables;
(f) the maintenance of personal records as members of SOCA; 
(g) the duties which are or are not to be performed by the police members of SOCA; 
(h) the treatment at occasions of police duty of attendance at meetings of the Police Federations and of anybody recognised by the Secretary of State for the purposes of section 64 of the Police Act 1996; 
(i) the hours of duty, leave, pay and allowances of police members of SOCA; and 
(j) the issue, use and return of— 
(i) personal equipment and accoutrements; and 
(ii) police clothing. 
 (3) Regulations under this paragraph for regulating pay and allowances may be made retrospective to any date specified in the Regulations, but nothing in this sub-paragraph shall be construed as authorising the pay or allowances payable to any person to be reduced retrospectively. 
 (4) SOCA may— 
(a) pay, or make payments in respect of pensions or gratuities to or in respect of any persons who are or have been police members; 
(b) provide and maintain schemes (whether contributory or not) for the payment of pensions or gratuities to or in respect of any such persons. 
 (5) Before exercising its powers under sub-paragraph (4), SOCA shall have regard to any provision made under the Pensions Act 1976.'. 
No. 74, in clause 38, page 21, line 12, leave out 'Whether or not' and insert 'only if''. 
No. 142, in clause 41, page 22, line 3, leave out from 'a' to end of line 4 and insert 'police member of SOCA'. 
No. 143, in clause 41, page 22, line 5, leave out 'The designated person' and inset 'A police member'. 
No. 144, in clause 41, page 22, line 6, leave out 'the designated person' and insert 'a police member'. 
No. 122, in clause 41, page 22, line 13, leave out 'the designated person' and insert 'a police member'. 
No. 123, in clause 41, page 22, line 16, leave out 'the designated person' and insert 'a police member'. 
No. 124, in clause 41, page 22, line 17, leave out 'The designated person' and insert 'A police member'. 
No. 125, in clause 41, page 22, line 21, leave out 'the designated person' and insert 'a police member'. 
No. 126, in clause 41, page 22, line 23, leave out subsection (8). 
No. 127, in clause 42, page 22, line 29, leave out 'persons designated' and insert 'police members'. 
No. 131, in clause 46, page 24, line 41, leave out 'designated person' and insert 'police member'. 
No. 132, in clause 46, page 25, line 1, leave out 'designated person' and insert 'police member'. 
No. 133, in clause 46, page 25, line 4, leave out 'designated person' and insert 'police member'. 
No. 109, in clause 46, page 25, line 5, leave out 'designated person' and insert 'police member'. 
No. 110, in clause 46, page 25, line 8, leave out 'designated person' and insert 'police member'. 
No. 111, in clause 46, page 25, line 10, leave out 'designated person' and insert 'police member'. 
No. 112, in clause 46, page 25, line 12, leave out 'designated person' and insert 'police member'. 
No. 113, in clause 46, page 25, line 24, leave out 'designated person' and insert 'police member'. 
No. 114, in clause 46, page 25, line 25, leave out 'virtue of the designation' and insert
'reason of holding the powers'. 
No. 115, in clause 47, page 25, line 39, leave out 'designated persons' and insert 'police members'. 
No. 116, in clause 47, page 26, line 6, leave out 'designated persons' and insert 'police members'. 
No. 118, in clause 49, page 26, leave out lines 36 and 37. 
No. 119, in clause 49, page 26, line 40, leave out subsection (2). 
New clause 8—Police members of staff of SOCA to have powers of constable etc.— 
 '(1) The police members of staff of SOCA (''the police members'') shall— 
(a) have the powers of a constable, 
(b) have the customs powers of an officer of Revenue and Customs, and 
(c) have the powers of an immigration officer. 
 (2) For the purposes of this Part ''police member'' means a person who falls within paragraph 13A of Schedule 1.'. 
I understand that the Minister has the floor, but she may wish to give way to the hon. Member for Beaconsfield (Mr. Grieve). 
Mr. Dominic Grieve (Beaconsfield) (Con) indicated dissent.

Caroline Flint: I will not give way at this juncture, as I am sure that the hon. Gentleman will intervene in the next few minutes.
Welcome to the Committee, Mr. O'Brien. I look forward to working with you today and during future sittings. This morning, we had a strong and expansive discussion, particularly about the fundamental issue of whether, in creating the Serious and Organised Crime Agency, we would be creating another police organisation or something entirely different. The latter is the Government's vision for the organisation. As I said earlier, if we felt that we were already doing the most that we could do to tackle organised crime, we might be satisfied with the status quo. 
That is not to say that the National Criminal Intelligence Service, the National Crime Squad, Customs and Excise drugs investigators and, for that matter, the immigration crime side of the immigration authorities are not doing very good work independently and in partnership. We are at this point because we are trying, as the consultation paper said, to be one step ahead of organised crime. I would like to pay tribute to the specialist staff who currently work in the NCS and NCIS. Alongside their police colleagues in those organisations, they often put themselves at risk in tackling dangerous criminals. We are trying to create a new organisation, one that can define its own culture in order to be one step ahead of serious and organised crime.

Dominic Grieve: The Minister said a moment ago that SOCA was a new organisation, designed to achieve something different. Just before the break, she ran through a list of other organisations that currently have powers akin to those of the police, such as Customs and Excise. Is the difference in the new regime that, whereas those other organisations have very specific remits—Customs and Excise dealing with  revenue and importation, for example—SOCA is, by the nature of the Bill, going to deal with general policing matters? That is explicit in the powers that it has been given, including entering premises, interviewing people and seizing documents. Is there not a danger that, in creating a SOCA divorced from a police background, we are just adding something else to the existing organisations that have the powers of constables, creating a parallel police force? That is the matter that the Minister has not yet addressed.

Caroline Flint: I disagree with the hon. Gentleman about a parallel police force. That would suggest that we are trying to create an organisation to work in competition with the activities undertaken at force level. I hope that we shall discuss in detail the arrangements for mutual assistance, for sharing information and for calling on SOCA for support and assistance where that is appropriate. Earlier, I gave the example of a police force that might want the assistance of SOCA because it had certain expertise and technical ability in relation to kidnapping. This is not about creating an organisation that is in competition with the 43 police forces. It is about recognising that in the case of level 3 crime, different components come together. We will also look for opportunities to go after those individuals if they are involved in level 1 and level 2 criminal activity. The amendments would create a situation in which the agency had people of different status and on different sites, working under different terms and conditions. That is not good. Part of our problem in addressing organised crime is that we have too many different agencies with different cultures and histories.
The key issue is not the name of the person. The hon. Gentleman and his colleagues want to refer to people as police members. It is about equipping them with the necessary and proportionate powers to do the job that they need to do. If that involves, for example, powers of arrest and entry, then that is quite right. I have conceded today that we will come back with something in the Bill to reassure people that the appropriate training will take place before people are designated powers. However, the Bill should have the flexibility to ensure that people, from wherever they come, are able to be designated the necessary powers to do the job. 
It seems that there is a partial assumption among Opposition Members that recruitment will come from the existing organisations working in this field, whether individuals come from the NCIS or the NCS, the police forces themselves, Customs and Excise or those dealing with immigration crime. However, we are looking to a future where individuals may come directly into SOCA as an organisation. They may not have come from a policing background, but building on the technical and specialist skills that they may bring with them to enable them to do their job, they will require the designation of powers that we feel the Bill provides.

Geoffrey Clifton-Brown: I apologise for not being in my place for the latter part of this morning's sitting. I had a meeting elsewhere in the House of Commons. The Minister has been clear  and explicit that she does not want to set up a separate, parallel organisation. She wants an organisation to act in concert with the police in fighting serious and organised crime. If she is really serious about that, does she envisage regular exchanges of duties with, or secondments from, the various police forces? Does she then envisage that the organisation might form part of a senior police officer's career path, so he or she spends some time within SOCA and thereafter goes back to their own or a different police force?

Caroline Flint: I would not be as prescriptive as the hon. Gentleman suggests. I am not ruling out future opportunity or the need for secondments from police forces into SOCA. I would not suggest that in order for someone to have a good career in police forces throughout the country they would necessarily have to have worked within SOCA in order to reach the highest ranks within their force areas, whether in the South Yorkshire force, the Met, or wherever.
We have a flow of people who choose for a number of reasons to work within different agencies, and I think that that will continue. We are also looking to establish direct recruitment into SOCA, in much the same way that NCIS and NCS were going before the consultation on SOCA. They were looking to more direct recruitment instead of relying on secondment. I cannot be as prescriptive as the hon. Gentleman outlines on secondment. It is a matter of recognising the different forms of law enforcement in this country. There is a need for police officers at force level, and that is not second class to the role of SOCA. It is about trying to deal with different types of crime. The way that we have reformed community support officers, or the way that police reform consultation has focused on people's specialist skills when coming into the police at force level, means that we are asking ourselves whether we want to fossilise a structure that stems from the 20th century, or to move it forward into the 21st century. We are keeping an eye on what is ahead.

John Mann: Does the Minister envisage a situation where, in future, the police force might recruit directly out of SOCA into their senior ranks people who had not previously gone through the police force, but had come through other career routes into SOCA?

Caroline Flint: That possibility would not necessarily be disadvantageous for the police force. Again, we need to consider the tasks that police forces require to be carried out. We are already, for example, providing funding for police forces throughout the country to have financial investigators. We recognise that in terms of asset recovery police forces should use to the full the powers provided by the Proceeds of Crime Act 2002. Whether we have community support officers, financial investigators or police officers who have a distinct and unique role, they are all part and parcel of trying to tackle crime at different levels. We should be open to different ideas of law enforcement, based on the outcomes that we want to achieve.

Andrew Mitchell: The Minister is being slightly tricky with the Committee. She made it clear that there are no terms and conditions yet, so no one can actually sign up. We have an expression of interest from potential recruits to SOCA, none of whom will join until they are aware of the terms and conditions.

Caroline Flint: The hon. Gentleman is repeating what I have just said. My point was that the charge was made that 95 per cent. of NCS officers were unwilling to transfer without knowing what their terms and conditions were likely to be. I do not see that as something we should be concerned about; it is absolutely practical and straightforward, and I am surprised it is not 100 per cent. As someone who used to work for a trade union, I would not recommend that anybody agree to a transfer without knowing exactly what is in writing about how it will affect them at the end of the day.
I understand that the Police Federation is concerned about a number of issues. There are representatives of the federation in the Committee Room, and I am meeting them tomorrow. We are trying to ensure that we maintain our commitment to police officers at police force level while trying to deal, in a more vision-seeking way, with the way that organised crime manifests itself. We will need people with the necessary skills to deal with that. 
The thinking behind these amendments is fundamentally misconceived. I hope that I have shown the Committee that these proposals are a step in the wrong direction and that they do not hang together. If agreed to, they would certainly drive a coach and horses through both the intention of the consultation paper on organised crime, and our intention to make Britain the least attractive place in the world for organised crime to flourish.

Andrew Mitchell: First, I join the Minister in welcoming you, Mr O'Brien, in your role as Chairman this afternoon. I have no doubt that you will jointly chair the remaining sittings of the Committee.
With one exception, I am distinctly underwhelmed by the Minister's response. That may not surprise her. An exception is her comments on training, but I am pretty underwhelmed by those as well. She excited and  tempted us with her comments on Second Reading, but there is nothing of substance in the amendment paper. There has been sufficient time, and it ought to have been possible for her officials to put some flesh on the bones of what she said on Second Reading. However, we have nothing. We will, of course, consider whatever she tables—I think that we have a commitment to this—on Report. 
Training will not solve the fundamental problem that we have set out today, and there was nothing in the Minister's remarks that addressed our concerns. I sense that I am not alone in Committee in feeling that the fundamental points that are the heart of the Bill and the setting up of the new agency have not been adequately addressed. 
We have had an interesting debate, however. The hon. and learned Member for Redcar (Vera Baird) slightly chided me on the suggestion that there might be unscrupulous defence lawyers around who would behave in the way that I set out in my example. There could be bureaucratic and other difficulties for the agency under the regime that is currently envisaged. In my work as shadow police Minister, I talk to many senior policemen and policewomen, and I am convinced that existing loopholes are exploited by very clever lawyers. I hasten to add that their approach is completely different from that adopted by the hon. and learned Lady. We must not introduce legislation that would increase the chance of unscrupulous defence lawyers behaving in that way. 
I sense that the hon. and learned Lady had some sympathy with my remarks. When she spoke about the way in which the powers will be handed out, I was reminded of the sheriff in the wild west riding into town and dispensing badges—in the present case, to members of SOCA so that they can undertake tasks for which they have not been properly trained. We heard nothing in the Minister's response to quiet those anxieties. She will not have much trouble carrying the vote on the amendment, but she has to win the argument on Report, which might be a little more difficult, and she will still have to win the argument in the other place, where, I suspect, her real trouble will begin. 
My hon. Friend the Member for Beaconsfield—he too is a lawyer, but none the worse for that—explained that the Government tend to dislike the present independence of the police. As my hon. Friend made clear, that dislike was embodied by the former Home Secretary. The Government seek greater control, and we are trying through this and other amendments to get a fair balance, one that reflects the rights and position of the Home Secretary to set strategic priorities but not to interfere unduly. The balance is not right at the moment. My hon. Friend the Member for Hertsmere (Mr. Clappison)—another lawyer, I fear, as well as member of the Home Affairs Committee—also made that point. 
On a number of things of which the Minister spoke, there is an enormous gulf between us. For example, she said that the amendments acted against the setting up of SOCA. With respect, that is absolute nonsense.  They do not; they are designed to take forward the aims that the Minister set out on Second Reading and to make SOCA more effective. She said that the amendments would ensure that we did not have one organisation with one culture. That is a desirable result, but at the end of the day the people who work in the agency must do the job for which they are trained and they must be able to exercise those powers competently. 
We do not agree on a range of issues. The best way to deal with that is probably for me to seek to divide the Committee. With permission, we will return to the subject on Report and in another place. 
Question put, That the amendment be made:—
The Committee divided: Ayes 6, Noes 11.

Question accordingly negatived.

John Heppell: I beg to move,
 That the Order of the Committee this day be amended in paragraph (1)(b) by leaving out ''9.25 am'' and inserting ''9.10 am''. 
This is a slight amendment to the resolution of the Programming Sub-Committee. We had a request from Opposition parties. I consulted Opposition Members and they are happy with the proposal. The amendment would make the starting time of the morning sitting 9.10 am instead of 9.25 am. 
Question put and agreed to.

Andrew Mitchell: I beg to move amendment No. 4, in schedule 1, page 120, line 28, leave out from '9)' to end of line 29 and insert—
 '(1A) The Director General shall appoint such staff for SOCA as he considers necessary for the discharge of its functions.'.

Bill O'Brien: With this it will be convenient to discuss the following amendments: No. 161, in clause 6, page 4, line 27, at end insert—
'(b) the financial resources expected to be available to SOCA for the financial year, 
(c) SOCA's proposed allocation of those resources;'. 
No. 162, in clause 6, page 4, line 39, after first 'to', insert 
', and the financial resources required to,'. 
No. 1, in clause 18, page 10, line 36, leave out from 'determine' to end of line 37 and insert 
'but not later than one month after the beginning of the financial year.'. 
No. 3, in clause 19, page 11, line 2, after 'must', insert 
'make an assessment of the funding SOCA requires in order to fulfil its annual plan and, in the light of that assessment, must'. 
No. 160, in clause 19, page 11, line 4, leave out subsection (2) and insert— 
 '(2) A determination under sub-section (1) must specify a single amount in respect of three financial years.'.

Andrew Mitchell: I thank the usual channels for, as ever, looking after the interests of the Committee.
The amendments form the third part of the principal point that we wish to make about this part of the Bill. Amendment No. 1 would make it clear that the Serious Organised Crime Agency will receive funding at a specified and certain time, amendment No. 2 would remove the power of the Home Secretary to ring-fence funding, and amendment No. 3 would make it clear that SOCA will be adequately funded and that the funding decision will be based on requirements set out by the director general of SOCA. Clause 19 sets out how the financial position of SOCA will be determined, but we are concerned that there is no reference to how the financial requirements of SOCA will be assessed. The amendments would ensure an assessment of the costs and objectives of the annual plan. I reassure the Minister that the Opposition are trying to probe whether there are adequate safeguards to ensure that the financing of the agency cannot be used in a political manner. 
We would like the Minister to comment on six key issues. First, the Government have not been clear about the exact sums of money that will be needed to set up SOCA and run the agency: there are key variables that have not been focused upon and costs that have not been clearly determined. Secondly, we want to remove from clause 18 the power of the Secretary of State to ring-fence funds. Thirdly, we would amend clause 19 to ensure that there is an assessment of the costs of the objectives of the annual plan. Fourthly, we want the action plan written by SOCA to contain references to the financial resources that will be required to fulfil the objectives outlined in the action plan. Fifthly, a three-year financial cycle would give SOCA the financial stability to plan ahead and to ensure that investigations do not have to be cut short—or at least to ensure that there is no risk that investigations might be cut short because of funding shortfalls. Sixthly, and finally, we want to amend the Bill to ensure that the director general of SOCA is able to appoint the number of staff necessary for the discharge of his functions. SOCA needs to have enough staff to operate efficiently. The history of staff shortages that affected the NCS must not be repeated. 
First, SOCA is to be allocated no new money on its formation apart from an initial grant in the first year of £27 million. The Government have still not pinned down exact numbers for key variables, such as staff and technology costs, but they have clearly stated that SOCA will have the same running costs as its  component agencies. The Government have not stated that there will be any increase in real-terms funding in 2007-08—indeed, in theory SOCA might, under the terms of the Gershon recommendations affecting non-departmental public bodies, have to cut staff. We seek an assurance from the Minister that that will not be the case. No extra money has been allocated for 2007-08 to accommodate year-on-year increases such as the cost of living allowance and staff pay increases. No extra money has been allocated for additional capital expenditure. By its very nature—the Minister has made this point—SOCA will deal with sophisticated criminals using technologically advanced equipment and techniques. If SOCA does not have the capital to invest in new technology to stay ahead of the criminal networks, the agency will clearly not be able to succeed. 
Given the inconsistency and lack of exact figures, it is not surprising that one of the concerns about the establishment of SOCA is that it could lead to the top-slicing of police force budgets. Funding for SOCA will come from the central Home Office allocation, so it is not surprising that police forces fear that money could be taken from their budgets to fund SOCA. We seek an undertaking that there will be no plundering of police force budgets and hope that the Minister will reassure us on that point. 
Secondly, if one thing is likely to ensure that SOCA's operations comply with a political agenda, it is the ring-fencing of its grant. We have seen that in other areas of policing. How will SOCA be able to avoid politicisation if the spending of its grant is subject to and determined by a set of terms and conditions from the Home Secretary? The Opposition are absolutely opposed to the Government's obsession with ring-fencing funds to public services, because it has an entirely negative impact by stifling organisations and removing the flexibility that they must have to achieve operational independence. It would be quite feasible for the Secretary of State to set SOCA's entire agenda by compartmentalising its funding and specifying the types of operations and resources to which funding can be allocated. We are opposed to that. The Secretary of State could ring-fence the entire grant to placate and ingratiate himself with certain sections of the electorate, without paying any attention to actual serious organised criminal activity within the UK, on which SOCA's board will advise him. In fact, clause 18(3) states: 
 ''The Secretary of State may, if he thinks fit, make any payment of grant under this section subject to conditions.'' 
That is an extreme example of micro-management and removes any guise of operational independence that the director general of SOCA may have been given in clause 22. We seek assurances in that respect. 
Thirdly, we seek to amend the Bill to give SOCA further financial stability by ensuring that the grant is made to SOCA on a three-year financial cycle. The Government have been sympathetic to that proposition in other areas. Financial stability and clear financial planning are vital to SOCA's effective operation. SOCA would not be able to complete investigations if funding ceased owing to shortfalls and budget cuts. Giving SOCA its grant every three years  would also appease police forces' fears that their budgets would be top-sliced in the manner that I described. In clause 19(2), the Government merely offer the possibility that the Secretary of State may, if he thinks fit, 
''specify a single amount in respect of two or more financial years.'' 
However, clause 19 offers no reassurance to SOCA. Do the Government envisage the Secretary of State using that provision as negotiating tool? Will SOCA be offered a variety of budgetary packages for different time scales? Will the Secretary of State offer the longer-term financial grant but only with strings attached, or will he make the sensible decision to set SOCA's grants over a longer period of time, to allow for financial stability? 
Clause 19 is a welcome step in the right direction from the Government, as it has long been felt that grants should be made in financial cycles of longer than one year in order to assist financial planning. However, clause 19 as it stands merely flirts with the necessary commitment. In the case of SOCA, that commitment is an operational must. With a clear financial position SOCA will be able to take on more cases with the confidence that it will be able to complete them more quickly and more effectively. 
Turning to points four and five, clause 19 sets out how the financial provisions of SOCA will be determined, but no reference is made to how its financial requirements will be assessed. The Secretary of State can make an entirely arbitrary decision. Under clause 19(7) the Secretary of State ''may require SOCA'' to provide him with information upon which he will base the financial grant. That places the onus solely on the Home Secretary and does not require him to gather any information from SOCA upon which he will base such a decision. We would amend the Bill to ensure that there is a clear assessment of the costs and objectives of the annual plan. We also want SOCA to be able to include in its annual plan the financial resources that would be required to fulfil the objectives of that plan. 
The drafting of the Bill is unusual in that the amount of the financial grant is to be determined wholly at the Secretary of State's discretion. There is no precedent for that in the Acts that established the funding mechanisms of the NCS or NCIS. Sections 110 to 114 of the Criminal Justice and Police Act 2001 specified that NCIS and the NCS service authorities were to prepare annual budget statements that set down the required funding for the next financial year, and the Secretary of State would allocate the financial grant to those organisations based on that information. The NCS and NCIS therefore had the opportunity to make their financial requirements clear to the Secretary of State. A similar mechanism is in place for the director general of the Assets Recovery Agency to outline the agency's financial requirements based upon the objectives outlined in its annual plan. Schedule 1 to the Proceeds of Crime Act 2002 specifies that the director of the agency must, before the beginning of each financial year apart from the first prepare a plan setting out how he intends to exercise his functions during the financial year. That is an annual plan  similar to the one that SOCA is required to prepare. The schedule goes on to state that the annual plan must include his priorities for the financial year, the financial resources expected to be available to him for the financial year and his proposed allocation of those resources. There is no such specification in clause 6 in relation to SOCA's annual plan. Our amendment is designed to redress the balance by ensuring that the Secretary of State bases his assessment for SOCA's financial grant on the annual plan, which will contain references to SOCA's financial requirements for the coming financial year. 
Finally, we want to ensure that the director general of SOCA is able to appoint the number of staff necessary for the discharge of the agency's functions. We also hope that our amendment requiring that SOCA outline its forthcoming financial needs will ensure that the resources required to start SOCA effectively are spelled out clearly to the Secretary of State. SOCA must have enough staff to operate efficiently and to put the fear of God into the perpetrators of serious organised crime in the UK. It is currently speculated that SOCA will be staffed by 4,500 to 5,000 officers taken from the various component bodies. It is vital that resources be provided to resource the agency properly to deal with organised crime. Historically, NCS has been understaffed. In the 2003-04 annual report of the NCS, Bill Hughes, then its director general, said, 
 ''We have been under strength this year. This in itself is a critical weakness.'' 
He added, 
 ''Last year, fewer people bore more strain as a result of a shortfall in staff.'' 
We do not want to see the maximum effort being put into establishing SOCA, only to find that the Government are unwilling to provide the financial support necessary and the director general is unable to recruit the number of officers and staff required to run the agency effectively. 
This is a sensible and moderate set of probing amendments. We hope that the Minister will either accept them in whole or in part, or reassure the Committee and, more important, those outside who have raised these important points, that they are unnecessary.

David Heath: I, too, welcome you to the Chair, Mr. O'Brien.
This is an important group of amendments, because we need greater clarity about the budget of the new organisation. To an extent, we have been at this point before in the genesis of the predecessor organisations. NCIS was set up on the basis of recharging from the constabularies and police authorities—an arrangement that did not work well, as we ended up with some unfortunate spats between the various police authorities and forces and NCIS about the appropriate level of funding for what was described as a service to them rather than a national agency. Clearly, that is not the case with the establishment of SOCA, but there are still some imponderables about exactly where the funding will come from and the extent to which it will be a top slice from the police  grant. Is there a view in the Home Office about whether there are any savings in the operational requirements of police authorities as a result of the establishment of SOCA? Will that be factored in to the distribution of police grant at a later stage? 
We are also not clear—this is tangential to the comments of the hon. Member for Sutton Coldfield (Mr. Mitchell)—about the extent to which SOCA will have to buy in services either from other parts of the Home Office or from outside. Will it have to buy in IT requirements in order to make them compatible with those of police forces around the country? The privatisation of the Forensic Science Service was announced today—something about which many of us have serious questions. We do not know what the implications of that privatisation will be for SOCA, but clearly there is a high-level requirement for forensic science support to enable SOCA to do its job properly. The privatisation proposals may have an impact on that, and we must consider those implications seriously. 
The hon. Gentleman makes another, crucial, point about the prospect of compartmentalisation and earmarking of resources within the SOCA budget to establish priorities laid down by the Home Secretary. That is not an idle threat; we know that it will happen. Yesterday's very illuminating interview with Sir Stephen Lander revealed the extraordinary ''policing by focus group'' that is being foisted on the organisation even before its creation, so that priorities 
''will be partly based upon on the number of column inches newspapers give to different types of organised criminality''. 
When the Daily Mail gets into one of its periodic spates of excitement about a particular aspect of crime, SOCA will be expected to apply its resources there. Presumably, if the Home Secretary of the day has anything to do with it, that is how the Home Office budget will be allocated. The interview reports Sir Stephen as saying, helpfully: 
 ''The brainboxes in the Home Office have been putting together a sort of harm model. 
 The model basically articulates the harm that is caused to the UK under a number of headings''— 
some of which he lists— 
''and tries to put a cost [on them]. 
 It also brings into play judgements about the degree of public concern and they have a proxy for this, which is the amount of column inches in the press. Which is not quite right''. 
I agree; it is not quite right. I hope that the Home Office will think again about setting its priorities in that way. The proposed amendments would at least correct that potential mischief by ensuring that there would be a single allocation. That would be based, one would hope, on a costed approach to the annual plan derived from the work of SOCA itself, which would make proposals. That approach would have the further advantage of making the budgetary arrangements more accessible to audit. 
That brings me to the last point on which I should like the Minister to comment in the context of the amendments. What will the process of audit be for SOCA? I am very keen to ensure that the Home Affairs  Committee has the greatest possible access to the budgetary requirements set out by the organisation and to information about the degree to which those are met. Presumably, SOCA, because it is not a police force, as we have been told repeatedly, will not fall under the remit of the Audit Commission, but will come within the remit of the National Audit Office and the Public Accounts Committee. If those bodies are to do a satisfactory job, they must be able to assess what the organisation itself assesses it needs to meet the demands put on it by the policing plan, which will in part derive from the Home Secretary's priorities. We are told that those priorities are to be led by an obscure voting system—a sort of ''Big Brother'' that gives people the police they want. 
The question of funding is full of complexities that are not clear at the moment. The Minister must, during the passage of the Bill, make much clearer how SOCA is to be funded, the level at which it will be funded, and where the funding will come from.

John Mann: I declare that I am not a member of a barristers', solicitors' or lawyers' trade union, but I shall not be pressing, as I have in other Standing Committees, for hon. Members who are members of such unions to make an appropriate declaration of interest as trade unionists are sometimes requested to do, for, in my view, rather spurious reasons.
I rise to seek guidance from the Minister on whether there is any conceivable scenario under any Government whereby SOCA could be used and involved in any industrial dispute. Remembering the miners' strike, I ask whether an alleged shifting of assets to avoid the sequestration of union funds, which a Government, Home Secretary or head of SOCA might unwisely, wrongly and unjustly deem to be an attempt at money laundering, would entice SOCA to take an active interest in pursuing anything to do with an industrial dispute.

Jonathan Djanogly: The financial stability of the new organisation would be paramount to giving it a solid start, so I wholly support the amendments, not least the proposal for a three-year funding cycle, which seems to be eminently sensible, not least so that the organisation can have the funding necessary for proper strategic planning.
I have two questions for the Minister. What is the cost of setting up SOCA and are the running costs likely to be more or less than those of NCIS, the NCS and their service authorities? In other words, what will be the incremental additional cost of having SOCA in place?

Caroline Flint: I shall go through the amendments in numerical order and try to deal with all the points raised by members of the Committee.
As the hon. Member for Sutton Coldfield explained, amendments Nos. 1 to 3 relate to the payment of a grant to SOCA. Amendment No. 1 would require the annual grant to SOCA to be paid by the end of April each year. I fail to understand the argument in support of that. It is a fundamental aspect of Government accounting that grants to NDPBs are not paid in advance of need. As the hon. Gentleman said—this  may answer the point made by the hon. Member for Huntingdon (Mr. Djanogly)—SOCA will have a budget of some £340 million, which is the combined budgets of the organisations that will form SOCA, and a £27 million start-up fund. Having said that, a lot of work is being done to see how the four constituent parts come together and what their assets and their current human resource contracts are. 
Finding where the work of those constituent organisations comes together is in the interests of efficiency and value for money. Doing so will ensure that we do not duplicate spending and that we get better value for money, but it will not necessarily be a way of reducing the amount of money that SOCA will have. That is why a lot of work is being done with the different organisations, particularly with NCIS and the NCS, to see where the overheads of each organisation lie. Those overheads will be unified as the organisations become one organisation. Hopefully that will result in our obtaining better value for money, particularly in contracts, since we might have one contract rather than two, three or four, depending on the arrangements for drug investigations by Customs and Excise and all the issues affecting the immigration crime department. 
We do not believe that it is necessary to pay the whole sum in the first month of the financial year. As I said, the usual practice is to pay grants in monthly instalments. That will ensure that SOCA has sufficient cash in the bank at any time to meet its day-to-day commitments. 
To pick up on a point raised about the financing of SOCA having a detrimental effect on the financing of police forces, I remind Committee members about a Government announcement made within the last month, of an extra £750 million being put into the fight against crime. That means central Government funding direct to police forces will increase by 5.1 per cent., including an increase of 4.8 per cent. in total formula grant, and more than £760 million in specific grants to police authorities. Taken together with the increase in central funding for police communication, IT and support services it provides an increase of 6.7 per cent. in Government spending on policing. 
We believe it is important to act rather than just speak. There is no doubt that in real terms police forces have had increased allocations since 1997. That is demonstrated by the number of police officers and also by the equipment and technology they are able to use, whether that is ANPR, or Airwave and so on, in tackling modern policing today. This is not about setting up SOCA against police forces but, as we said in the previous debate, about recognising that there are different forms of criminality that have to be tackled in different ways. Different organisations have to be equipped and resourced to meet that task. 
This is in a context, of course, about spending in all these areas. Based on our track record, people should have confidence in this Government. They should compare it with the Conservative proposals to remove  substantial moneys from the Home Office budget, which would eventually lead into discussions about where that money might go.

Andrew Mitchell: I am distressed by the party political tone that the Minister is adopting in dealing with my perfectly reasonable amendment. But in a spirit of good will, I assure her that the Conservative party's pledge for 40,000 more police officers starting on day one of a Conservative Government is costed and guaranteed.

Caroline Flint: Forty thousand, starting on day one?

Andrew Mitchell: From day one.

Caroline Flint: Ah, from day one. The hon. Gentleman corrects either me or himself to say ''from'' day one. We will all wait with bated breath to see whether that ever comes to fruition.
The provision is about recognising that, in tackling issues around law enforcement, the Home Office has to engage with other Departments; we engage with the Treasury on a whole number of issues. I believe that the track record of the Home Office in the years since 1997 shows that we have put our money where our mouth is, and that policing and tackling criminality in its various forms are things we have supported in a real and proper way. So we do not agree on amendment No. 1. 
Amendment No. 2 would remove the ability to attach conditions to SOCA's grant. An inference has been drawn that there are somehow sinister motives in the provision, but it is standard in many statutes establishing non-departmental public bodies, including in the Police Act 1997, to allow some flexibility in attaching conditions to grants. The provision would enable, for example, an element of the grant to be ring-fenced for a specific purpose. One example might be funding from the Treasury's invest to save fund, which must be applied to the purpose for which the successful bid was submitted. 
I understand another example already exists regarding NCIS and the NCS, which together cover a number of smaller functions. There is a discussion at present about where those functions might sit in the future, which hon. Members might want to discuss at a later date. Some of the smaller NCIS functions are being met by separate funding streams—for example, tackling wildlife crime is funded by the Department for Environment, Food and Rural Affairs. I understand there is a precedent for the Secretary of State to determine resources. I refer hon. Members to sections 17 and 62 of the 1997 Act in terms of grants to NCIS and the National Crime Squad respectively. I do not think anyone should read sinister motives into this, but occasionally there are points at which ring-fencing funding has an appropriate part to play in tackling certain types of crime.

John Mann: I ask for clarification of how the provision would work in terms of wildlife crime. The evidence from international wildlife organisations is that wildlife crime—particularly high-value wildlife crime such as the smuggling of rare and valuable  species or parts of species—is run by the same organised criminals who smuggle drugs, arms and people. How would that link in if DEFRA was funding wildlife crime separately rather than having the whole area properly integrated into one, effective national system? That precise problem—missing out on linkages—is what I had thought SOCA was meant to be addressing.

Caroline Flint: We are not ignoring linkages. My hon. Friend is quite right. At the end of the day, organised criminals are entrepreneurs. At any given time, they will look at the area where they feel they can make some profit. That might be wildlife crime, or it might be drugs. We do not ignore those issues, but there are specific specialisms, such as wildlife crime, animal right extremism and paedophilia on the internet, for which there may be some common intelligence sharing, surveillance and operations issues that cross the organisation of SOCA. There might also, however, be the need for specialist expertise in those particular crimes. In those situations, such as in the case of DEFRA, it was felt that that the Department would put some money into the pot to ensure that that sort of expertise is supported. I do not want to deflect from what my hon. Friend has said, but—perhaps to pre-empt a further question—there are a number of areas that are not necessarily directly to do with drug smuggling, people trafficking and gun crime, although there may be linkages, as my hon. Friend points out, that are currently being looked at in relation to how they might fit into SOCA. A final decision has not yet been made as to where they would finally sit.
I am not trying to fob off my hon. Friend. We are very conscious of the problem, and, as the Minister responsible for dealing with animal rights extremism, I am acutely aware of how we need to look at particular areas. That is not to say that the criminals in specific areas will not be involved in drugs, human traffic or gun crime, or that there will not be issues of intelligence that would be appropriate to them. It is, however, about recognising that we do need some specialist skills in dealing with particular areas.

David Heath: The Minister is right. I am not trying to deflect her from the main thesis in answering these amendments, but there is clearly work presently done by NCIS and the NCS, collating intelligence on matters that would not necessarily fall into the category of serious and organised crime, but which nevertheless cannot be done at local force level. That was the point I was trying to make earlier, and it is clearly one we need to return to. There are lacunae in the arrangements, and it is not clear how they are going to be met by the arrangements that the Minister is putting in place.

Caroline Flint: I have listened to what the hon. Gentleman has said, and that will form part of our debate on these particular areas of crime and the future role of the agency.
Amendment No. 4 seeks to remove responsibility for deciding the level of staffing for SOCA from the agency's board to the director general. That would be inconsistent with the Government's arrangements for SOCA as set out in the Bill. Under clause 6, it is the responsibility of the SOCA board as a whole to prepare an annual plan. The level of resources, including the numbers of staff required, must be a central part of any such plan. Clearly, the director general will play a central role in preparing the annual plan and will need to consider the level of staffing necessary to enable him to give effect to it. Ultimately, the plan must be agreed and owned by the board. 
I have no doubt that the board will wish to delegate to the director general responsibility for the recruitment of individual staff, although the board might wish to have a say in certain appointments. It is entirely proper for the board of SOCA to retain those responsibilities. That crystallises the concept that the director general discharges SOCA's functions on behalf of the board. On the other hand, the amendment would give too much independent control of SOCA's human resources to the director general. 
Accordingly, rather than follow the example of NCS and NCIS under the Police Act 1997, we have adopted the approach of corresponding paragraphs in schedule 1 to the Private Security Industry Act 2001 and in schedule 2 to the Police Reform Act 2002. Those relate to the Security Industry Authority and the Independent Police Complaints Commission respectively, both of which are NDPBs like SOCA. I hope that what I have said about the respective roles of the director general and of resources and staffing in relation to the annual plan will reassure the hon. Member for Sutton Coldfield that the director general will not be involved in advising on and influencing the shape of the organisation. 
Even the NCS and NCIS model ensures that the director general does not have responsibility for appointing staff but, rather, that their respective service authorities do. In that sense, it is the board that is analogous to those service authorities. I hope that that clarifies our intention, and I invite the hon. Gentleman not to press the amendment. 
In taking decisions on the level of grant, we must consider the bigger picture. I assure the hon. Gentleman and other Committee members that, before determining its grant, there will be full discussion with SOCA about its needs. That should be taken as read; it is not necessary to put it in the Bill.

Geoffrey Clifton-Brown: I welcome what the Minister has just said. Will she take into account the fact that the Deputy Prime Minister has taken great credit for the fact that local authorities are to move towards a three-year budget? Is that not a good precedent for this organisation?

Caroline Flint: I do give credit to my right hon. Friend the Deputy Prime Minister for his role in relation to local authorities. We try to look across Government to give surety of funding. However, we have to consider the situation that we are in and the wider picture in terms of the Home Office and of defining what we need when putting our case to the Treasury. I hope that my comments have assured the hon. Gentleman that here, as in other areas, we will aim to give people certainty about the grants that will be allocated to them in order for them to undertake mid-term planning for their organisations. Amendment No. 160 goes somewhat too far and would place too many restrictions on the Government.
The principle of including financial information in SOCA's annual plan, as proposed in amendments Nos. 161 and 162, is sound. It would formalise what is already likely to happen in practice. For example, the NCS provides a detailed financial analysis in its annual plan. However, I cannot invite the Committee to accept those amendments, as they are too restrictive. Linking the financial resources that SOCA would require to each priority would limit in-year flexibility of resource allocation in response to changing operational demands. If the Opposition agree not to press those amendments, I shall move an appropriate amendment on Report, which I hope will meet the requirements and intent by placing the relevant provisions in the annual plan. 
My hon. Friend the Member for Bassetlaw (John Mann) raised a point about trade unions and how those involved in industrial action might be affected. Clearly we do not see trade unions as serious organised crime groups—my hon. Friend may be pleased to hear that. For matters falling under the civil recovery of assets, investigation and proceedings would be for the Assets Recovery Agency rather than SOCA. SOCA  may have an interest in information arising from that process, but takes no direct lead. I would be happy to write to my hon. Friend on that if he wishes. 
I hope that I have covered the points raised and assure the Committee that we seek to ensure that SOCA has the resources. Money will be important to SOCA, just as it is to the 43 police forces in England and Wales. However, the issue is not just about money, but the sort of organisation we want and its ability to deliver, based on resources. The organisation's biggest resource is the people within it—their skills and expertise, and how they come together to work to defeat organised crime.

Andrew Mitchell: I am most grateful to the hon. Member for Somerton and Frome (Mr. Heath) for his support of the probing nature of the amendments, on which we have had an interesting and helpful debate.
The hon. Member for Bassetlaw intervened to assure the Committee that he is not a lawyer. Similarly, I would like assure the Committee that I am not a lawyer and neither, I think, is my hon. Friend the Whip. The hon. Gentleman sought an answer about trade unions. I know that new Labour has moved a long way under the Prime Minister, but I find it surprising that the Minister needed to say, ''We do not see trade unions as serious organised crime groups.'' The fact that she was required to give the hon. Gentleman that assurance shows how much the political landscape has changed over the last few years—I have to say that he did not look that reassured when he heard it, but at least it is on record. 
The hon. Gentleman also made a point about money laundering. Even now, my hon. Friend the Member for Beaconsfield is toiling away at some simply magnificent amendments on money laundering that.

Caroline Flint: He's behind you.

Andrew Mitchell: I must correct myself: my hon. Friend the Member for Beaconsfield has just returned from drafting some absolutely magnificent amendments on money laundering that will, I hope, captivate the hon. Member for Bassetlaw and tempt his support next week, or even on Thursday. My hon. Friend the Member for Huntingdon asked a number of questions, which I think the Minister also answered.
When the Minister rose to speak, notes were flying backwards and forwards and I had to suppress a feeling of immense excitement: I thought that some of my amendments might have found favour with the Minister. It must be said that she teased me with amendments Nos. 161 and 162, saying that if I did not press them she would return later with something similar. Accordingly, I am happy not to press those amendments. 
The Minister made a few rather regrettable political points, but I am prepared to conceded that this year's settlement for my police force, West Midlands, which I have discussed with her colleagues in the Home Office, was better. It recognised the particular difficulties that face those who police Britain's second city. I am certain that that has nothing to do with likely  events on 5 May, but we are nevertheless grateful that our needs have been recognised. The Minister made a number of points on that subject. 
The Minister also spoke about ring-fencing. The Opposition are extremely suspicious about the way in which the Government use ring-fencing. We think it is a form of micro-management, and we do not like the way in which what should be locally determined priorities are distorted by its ever-increasing use by the Home Office. We do not agree with her on that. 
The Minister came precious close to satisfying me on amendment No. 3. However, not least because I want to help by placing it on the record that the hon. Member for Newcastle-under-Lyme (Paul Farrelly) was unable to vote on the first amendment when he was in fact in his place, but principally because of its declaratory nature, I would like to put amendment No. 4 to the vote. 
Question put, That the amendment be made:—
The Committee divided: Ayes 6, Noes 11.

Question accordingly negatived. 
Question proposed, That this schedule be the first schedule to the Bill.

Jonathan Djanogly: I am grateful for the opportunity to discuss schedule 1, which in effect is taken with clause 1. We have discussed the mechanics of SOCA. We have discussed its operations. We have discussed its funding. We have discussed the governance of SOCA. However, we have not yet discussed the purpose of SOCA. The Government may assume that because the Opposition support the concept of SOCA—we do—its purpose can be ignored. That would be incorrect, and I believe that a few things need to be mentioned. The Minister said earlier that we are suggesting through our amendments that we want to keep things the way they are.

Bill O'Brien: Order. I draw the hon. Gentleman's attention to the fact that there is nothing in schedule 1 about the purpose of SOCA. That was the subject of clause 1, which we debated this morning; the subject should have been raised then.

Jonathan Djanogly: With respect, Mr. O'Brien, I would suggest that the purpose is intrinsic to the schedule. I could address my comments to any part of the schedule.

Bill O'Brien: Order. The hon. Gentleman started by saying that there is no record of SOCA's purpose. I am saying that schedule 1 makes no reference to that point, and therefore that the matter being raised by the hon. Gentleman is not included in this part of our business. I am advised that that part of the hon. Gentleman's contribution should have been made this morning when clause 1 was being debated.

Jonathan Djanogly: Thank you, Mr. O'Brien. The subject on which I was going to speak is equally applicable to clause 2.
Question put and agreed to. 
Schedule 1 agreed to.

Clause 2 - Functions of SOCA as to serious organised crime

Question proposed, That the clause stand part of the Bill.

David Heath: At the risk of labouring a point beyond anything that is reasonable, I wish to draw attention to the dissimilarity of subsections (3) and (4), which deal with the commissioners and rightly contain a requirement to act in agreement on revenue fraud. Under subsection (3), there is a further and, in my view, otiose requirement for SOCA to act if the Serious Fraud Office declines to act, which does not apply with regard to revenue fraud. Such matters bolster my case for re-examining the issue. Does the term ''commissioners for Her Majesty's Revenue and Customs'' mean anything or is it, as I suspect, dependent on the passing of a separate Bill, which we cannot be assured will pass through Parliament and receive Royal Assent at this stage?

Jonathan Djanogly: Creating SOCA for its own sake is not a reason in itself for doing so. As of yet, the Minister has not adequately set out the Government's intentions. The question is not so much how SOCA will work, but how its functions will deal with the particular problems that society faces and which now give cause for the agency to be created. In other words, what are the functions of SOCA? What is its purpose?
We know, for example, that drugs use has shot through the roof in recent years. We know that more British children try drugs than do children in any other European country. We know that a dose of cocaine is half the price that it was 10 years ago. How will the agency stop that? What is it that we now do wrong that SOCA will correct? As I said before, just because the Conservative party supports SOCA, it does not mean that we, and the Committee as a whole, should not question its function and how it will solve the problems we face. That is the purpose of the criminal law.

Paul Farrelly: I take this opportunity to deal briefly with the relationship between SOCA and the Serious Fraud Office, as recognised explicitly under clause 2. I apologise to the Committee and the Minister for the fact that I could not be in Committee for the whole of this morning's sitting, as a result of which I did not hear my hon. Friend's explanation of the exclusion of the SFO from SOCA, pursuant to the amendment tabled by the Liberal Democrats.
On reflection, I agree entirely with the formal exclusion of the SFO from SOCA on purely practical grounds. Apart from the potential for disruption, the SFO pursues serious, sophisticated and financial crime, which, albeit very organised, does not generally involve violence. Indeed, its exclusion from SOCA acknowledges the fact that the pursuit of fraud might be diluted among all the other priorities that SOCA will have to pursue. Nevertheless, there are serious potential overlaps between their work, not least in respect of the laundering of the proceeds of crime. I am thinking, albeit not exclusively, about the operations of Russian crime syndicates and drugs syndicates. 
Clause 2 explicitly acknowledges those overlaps in the reference to the responsibility of SOCA to liaise with the SFO. I also welcome the apparent extension of plea bargaining to the SFO, which the Committee will come to later. Notwithstanding the statutory responsibility on SOCA to liaise with the SFO on matters of fraud, the two agencies will clearly have to work closely in practice to ensure that the liaison happens the other way around, as clause 2 contains no reciprocal duty. They will also have to work closely to ensure that intelligence is shared, that there is effective international co-operation with agencies such as the FBI and that the two agencies generally co-operate rather than compete where their functions overlap. 
The SFO has long experience of the use, the advantages and the practical limitations of the section 2 interview powers that are now being envisaged for SOCA. It is experience that the SFO should clearly share with SOCA. When I was a financial journalist pursuing money laundering, fraud and financial crime, the SFO was generally known as the ''Nightmare on Elm Street'', a name derived from its headquarters off Gray's Inn road. It is important that the lessons are learnt so that SOCA does not become the nightmare on Parliament square.

Caroline Flint: Clause 2 lays the foundations for the organisation of SOCA's functions in respect of serious organised crime. I am not sure whether the hon. Member for Huntingdon has read the White Paper that we produced and widely consulted on, which dealt with why we are establishing the Serious Organised Crime Agency, but if he has not, he should have a look. If he has read it, he should have another look. That document contains extensive arguments about the nature of organised crime and how it manifests itself. It talks about the harm caused by organised crime and why we have reached the point where we feel that, despite the good work carried out by those individuals who work for the NCS and NCIS, those who work on drug investigations in Customs and Excise and those in the immigration crime unit who deal with the heartrending personal tragedies of human trafficking, there is consensus in principle that the organisations and the people within them could do even better under one organisation. That is a simple answer to a difficult and complex question.
The law enforcement activity surrounding criminal entrepreneurs requires some of the traditional powers of police officers, but it also requires an number of different approaches to intelligence and harm reduction. The hon. Member for Somerton and Frome quoted an article in The Independent and subsequently in the Daily Mail in reference to the way in which organised crime is debated in our media. I have not read the full article—I shall do so—but I think that it is important to appreciate and understand how the harms of crime, locally, regionally or nationally, are perceived by the public and impact on them. 
Sometimes, we politicians or those involved in law enforcement may feel that we know the right areas to investigate and pursue. However, we might not have the impact that we want in supporting communities and individuals. That is why one of the step changes reflected in the rationale of SOCA is that, although we are not taking our eye off the ball of the serious criminal offences in which some of those whom we would like to see behind bars are involved—drug smuggling, people trafficking, bringing arms into the country, the distribution of weapons—we are considering how we can frustrate their networks and disrupt their organisations. In addition, if appropriate, we are considering how to establish whether such people are involved in other, level 1, crimes. In the short term, the immediate priority is to tackle such people and take them out of action, rather than wait—perhaps for many years—before going for one individual who might be protected and sheltered from our investigation in all sorts of ways. Such approaches are important when we consider the harms and the impact on communities. The Home Office is certainly  not arguing that the priorities for SOCA should be dictated by column inches in newspapers. However, we should be mindful of how the public perceive organised crime. 
Many people may not even see the connection between what happens to them in their communities and organised crime. A good example of that is money laundering. Ordinary members of the public may go into a shop, buy goods and not realise that that enterprise is a front and that they have unwittingly become part of the laundering of money in the wider community.

David Heath: I recommend that the Minister look at the interview in The Independent. The words that I used were not mine, but Sir Stephen Lander's. Clearly, he had formed the impression from debates with the Home Office that he was to be judged on quantitative terms—column inches—rather than on the qualitative terms that the Minister is now expounding. That is a very alarming prospectus for the new organisation.

Caroline Flint: I shall look into the issues raised by the article.

Vera Baird: I have the article here. Sir Stephen says:
 ''The brainboxes in the Home Office have been putting together a sort of harm model. The model basically articulates the harm that is caused to the UK under a number of headings: the rewards taken and made by the criminal; the social and economic harm to the UK; the institutional harm—corruption for example and illegal immigration—and tries to put a cost on them. It also brings into play judgements about the degree of public concern and they have a proxy for this, which is the amount of column inches in the press.'' 
The hon. Member for Somerton and Frome went on to quote Sir Stephen saying, 
 ''Which is not quite right'', 
and he made a great point of that. However, Sir Stephen said: 
 ''Which is not quite right but is probably as good as you will get. It is pretty rough and ready but it is asking the right questions. It is asking not, what is the incidence of something, but what is its impact.'' 
It is a good idea to quote someone in full rather than in part.

Caroline Flint: I thank my hon. and learned Friend for that intervention, which proves that anything can mean anything if it is taken out of context.
We should be aware of and brave about the fact that for the first time we are trying to find a way of identifying different harms to communities and society and addressing them in a meaningful and accountable way. By serious and organised crime, we generally mean criminal activities across national borders carried out in conjunction with others to produce substantial profits. We have not defined that in the Bill, as SOCA will not have an exclusive remit on the issues that it is tackling; it will also need to engage with agencies dealing with more localised criminal activities. In its focus on reducing the harm caused by serious organised crime, SOCA will need to make a judgment about the most effective use of its resources.  We do not want to set artificially restrictive definitions. In practice, SOCA will respond to the strategic priorities set by the Secretary of State under clause 9, which will reflect the views of the Cabinet Committee on Organised Crime. 
As I said before, SOCA will take the place of four organisations or parts of organisations in tackling those important areas of criminality. However, this is not just a machinery of government-type change that brings them together for administrative convenience. However good each of the bodies may be in its own right, the reality is that they are operating according to priorities and performance management regimes that treat them as single bodies. They cannot be as effective as a single body, which can focus its combined resources on a single strategy. SOCA will work in a fundamentally different way to its predecessors. Its prime concern, and the ultimate purpose of the organisation, is reducing the harm from organised crime. Criminal convictions and seizures of drugs will of course be an important component, but as I said, we are also looking at ways to disrupt illegal business through other means, such as by pursuing a major operator for tax evasion or by hardening the targets that criminals are attacking. Most important, SOCA will be a genuinely intelligence-led organisation. Real knowledge and understanding of the problems must be its first responsibility. That in turn will drive decisions about which activities to target and the best means of attacking them.

Geoffrey Clifton-Brown: The Minister says that the organisation will work with other agencies. Could she put a little more flesh on those bones? She has just said that it will need to have very close links with other bodies. I presume she means links with the intelligence agencies—or will SOCA have its own intelligence function? Will it work with Interpol and Europol; if so, how and how closely? I am talking about international crime-fighting functions. Could the Minister please tell us a little more about how that will work?

Caroline Flint: If the hon. Gentleman will not take offence, I will just say that I do not want to take up time on issues that come under later clauses. All the issues that he raised about intelligence-sharing, the agencies that SOCA will work with, whether those agencies are in the United Kingdom or overseas, and mutual assistance will be dealt with in detail under other clauses. I hope that I can continue and return to those points later.
In short, as the clause makes clear, SOCA will be engaged in preventing, detecting and reducing serious organised crime and limiting the harm that it causes. Crime does not organise itself neatly; lifestyle criminals are often involved in serious complex fraud or revenue fraud causes, and those engaged in organised crime are hardly likely to provide genuine and accurate tax returns about their ill-gotten gains. The investigation of those involved in drug trafficking or people smuggling might naturally lead SOCA into areas of fraud and we want to be able to continue to  pursue such matters if SOCA is to live up to its objective of relentlessly pursuing serious organised criminals. 
Both the hon. Member for Somerton and Frome and my hon. Friend the Member for Newcastle-under-Lyme made comments about the Serious Fraud Office. On one of the points that the hon. Member for Somerton and Frome raised, I will look at the drafting of clause 2(3)(b) and consider it, but I do not want to commit myself any further. I know how particular he is about the wording of legislation.

David Heath: That is my job.

Caroline Flint: Yes, it is, and I hope that I will have some rewards for the hon. Gentleman down the line. He is also right about the commissioners. We must make sure that the legislation sits neatly with other measures being dealt with by other Departments.
On the point raised by my hon. Friend the Member for Newcastle-under-Lyme, we had a discussion on the matter this morning. As he is aware, serious complex fraud and revenue fraud are primarily the responsibilities of the Serious Fraud Office, as well as the Inland Revenue and Customs and Excise, which will be Her Majesty's Revenue and Customs in future. As I said this morning, we do not want to duplicate those bodies' activities, so SOCA will only investigate organised revenue fraud with the agreement of the commissioners. 
We thought about the making Serious Fraud Office part of SOCA. We believe that we are being radical and ambitious in creating such a structure with the organisations and parts of organisations that are currently coming together in SOCA, but we will keep under review how it is working, as well as how the nature of criminality changes. I gave some examples this morning of the sort of cases that the SFO looked into in 2003-04, and they do not really sit neatly with the SOCA framework. I hope that my hon. Friend is reassured on that point. 
SOCA might wish to undertake activities directed at reducing the harm caused by revenue and serious or complex fraud through non-enforcement routes, for example by disseminating information to financial institutions on combating types of fraud. I am pleased to have visited the National Hi-Tech Crime Unit and seen the work that it does on financial crime. That work is an important part of our endeavours to deal with a much more 21st-century approach to the use of the internet in hacking into and thwarting financial systems. That unit does a good job.

Jonathan Djanogly: Is the Minister suggesting that SOCA will take responsibility for the National Hi-Tech Crime Unit? I know that the paedophile online investigation team is important for the Internet Watch Foundation, which deals with child pornography.

Caroline Flint: The unit will form part of SOCA. In relation to the paedophile unit, we are reviewing aspects of work that is currently undertaken by some organisations to see how and whether they would fit  into the new structure. I cannot be more definite at the moment, but we are considering a number of issues in terms of paedophile activity and wildlife crime, animal extremists and other areas. We are considering the nature of those crimes, how they fit into the concept of serious and organised crime and which organisation is best directed to carry out the work of tackling them, but we have not ruled any of them in or out.

David Heath: I am not asking the Minister to pre-empt the conclusion of those discussions, but it would be helpful if the net were to be extended to the national functions carried out by the Metropolitan police, because as she knows it has several specialist units that provide a national service in a number of areas that might usefully be incorporated into SOCA and available to the rest of the police service, rather than being funded by the London council tax payers.

Caroline Flint: I hear what the hon. Gentleman says, but another argument might be that those units are doing well in the Met, therefore it does not necessarily follow that they should be put in SOCA. However, we are considering all the functions and how they will relate to SOCA in future. I should not like any hon. Member to leave the Committee thinking that we do not think that those areas are not important in their own right. We are mindful of that.
Other Government Departments and agencies may be responsible for areas that are targeted by serious and organised crime, including counterfeit medicine and DVD piracy, which provide opportunities for criminal enterprises operating internationally. Work carried out to frustrate such activities will still need to involve the responsible bodies, but the extent to which SOCA becomes involved will have to reflect the seriousness of the harm that is caused at any particular time. 
Wherever the boundaries of SOCA's activities are drawn, it will need to have a close, effective working relationship with agencies on the other side. In creating SOCA we intend to reduce the number of organisational boundaries and set up arrangements that ensure that the UK endeavours to provide the most hostile environment possible for serious and organised crime. 
Question put and agreed to. 
Clause 2 ordered to stand part of the Bill.

Clause 3 - Functions of SOCA as to information relating to crime

Andrew Mitchell: I beg to move amendment No. 5, in clause 3, page 2, line 42, after 'agencies', insert—
'(ca) intelligence agencies,'.

Bill O'Brien: With this it will be convenient to discuss amendment No. 6, in clause 3, page 3, line 19, at end add—
 '(6) In this section ''intelligence agency'' means— 
(a) the Security Services, 
(b) the Secret Intelligence Service,
(c) Government Communications Headquarters, or 
(d) any other United Kingdom intelligence-gathering agency.'.

Andrew Mitchell: This is the first of the six small points that we wish to probe and, following the intervention of the Whip, my hon. Friend the Member for Cotswold (Mr. Clifton-Brown), we might call it the Cotswolds amendment. Amendment No. 5 would add the words ''intelligence agencies'', which deals with the point that he sought to elucidate, and amendment No. 6 is rather more explicit about which intelligence agencies we are talking about.
The purpose of the amendment is to add an express requirement to SOCA to disseminate information with the United Kingdom intelligence agencies and places SOCA and the intelligence agencies on a statutory footing. There are similar provisions in the Bill relating to police forces, special forces and the law enforcement agencies. Since a measure introduced by the Conservative Government was passed, both the Security Service and the Secret Intelligence Service are on a statutory footing. The key point is that the relationship between SOCA and the UK intelligence agencies should be formalised. As drafted, the Bill creates no statutory requirement for SOCA to disseminate information to the UK intelligence agencies. Information and intelligence must flow freely between SOCA and the agencies to remove the risk of duplication—what I believe is known as a blue on blue event—and they must work to ensure joined-up policing. 
We want to amend the Bill to add an express requirement for SOCA to disseminate information with the Security Service and the Secret Intelligence Service. Our amendment puts the relationship between SOCA and those intelligence agencies on a statutory footing to assist information sharing and collaboration. The Bill provides for relationships with other bodies. The clause does not expressly state that SOCA must disseminate information relevant to the prevention, detection, investigation or prosecution of offences to the security services or the secret intelligence services. As SOCA's remit is focused on serious organised crime, which by its nature crosses international boundaries, highly valuable information will be accumulated. 
The British police and law enforcement system has been praised for the high degree of communication between the different agencies involved. We must ensure that the situation that occurred in the United States, where the FBI and CIA were not exchanging compatible information before the tragic attacks on the World Trade Centre, does not occur in this country. For one agency to know that individuals were learning to fly planes but not to land them and for it not to disseminate that information was a grave error. We must do all that we can to avoid any danger of that in the United Kingdom. When I first became a shadow Home Affairs Minister, I went to see the senior people who run the Metropolitan police at Scotland Yard. They made the point that in Britain, because of the  joined-up nature of policing, such an event as tragically took place in the United States could not happen in the UK. The purpose of the two amendments is to ensure that that point is underlined in the Bill. I hope that the Minister will be able to agree to the amendment or to explain to us why it is unnecessary.

Caroline Flint: I begin by assuring the hon. Gentleman that SOCA will have a close working relationship with all the intelligence agencies in furtherance of their shared objective of combating serious crime in the United Kingdom. The fact that we appointed Sir Stephen Lander, former director general of the Security Service, as chairman-designate of SOCA is testimony to that. We are clear that SOCA and the intelligence agencies will acquire information of value to each other and they must be free to share such information in furtherance of their respective functions. The information gateways in clauses 32 and 33 will facilitate that.
Although we share the sentiment behind the amendments, we do not believe that they are necessary. Clause 3(2) already provides that SOCA may, as one of its functions, disseminate information to ''law enforcement agencies''. That term is defined in subsection (4) and includes Government Departments. The Security Service, the Secret Intelligence Service and GCHQ are all non-ministerial Government Departments; as such they already come within the definition of a law enforcement agency. 
The Bill will achieve the intent behind the amendments. I hope that the hon. Gentleman is reassured by my remarks and I invite him to withdraw the amendment.

Andrew Mitchell: This is an important point. The Minister says that the Bill says ''may'' rather than makes the matter an express requirement, as is the specific purpose of our amendments, so I cannot accept her argument, no matter how lucidly it was put. Therefore I want to press amendment No. 5 to a Division.
Question put, That the amendment be made:—
The Committee divided: Ayes 6, Noes 10.

Question accordingly negatived.

David Heath: I beg to move amendment No. 84, in clause 3, page 3, line 12, after 'is', insert
'recognised by the Secretary of State as being'. 
There should be some accountability for passing information to other organisations. I do not doubt that SOCA will take its responsibilities seriously and will be very careful, but the British citizen is entitled to have the satisfaction of knowing that the Secretary of State has given some sort of imprimatur to the organisation in question—that it is a bona fide police force or investigation agency. Under the present wording, people carrying out a function similar to those carried out by a police force or SOCA would include bounty hunters. They would be entitled to receive information—or SOCA would be entitled to give it to them—by virtue of clause 3. I do not think that that would be a proper use of information gathered within the United Kingdom by SOCA and I suspect that SOCA would not feel that it was appropriate either. However, the legal justification for it is contained in the clause, loosely worded as it is.

David Cairns: I am genuinely curious and not trying to trip the hon. Gentleman up. Would the effect of his amendment be to exclude organisations and agencies that do not come under the remit of the Secretary of State, such as the Scottish Drugs Enforcement Agency? Would they be affected?

David Heath: Absolutely not. Let me make it clear that that is covered under a separate subsection. The Scottish DEA is defined as a separate police force, for example, and therefore comes under (3)(2)(b). We are talking about those organisations that may be defined as law enforcement agencies under (3)(2)(c). Those include the customs and excise commissioners—or the revenue and customs commissioners, as they will become. The Scottish Administration is still there—there is no problem with that. The
''person who is charged with the duty of investigating offences or charging offenders'' 
is understood to be within British jurisdiction under English, Welsh or Scots law. However, there are other people who may be outside the United Kingdom and exercising some power similarly to a police force or SOCA and to whom SOCA may be entitled to disseminate information. The laxity of the wording  may have little consequence in practice, because SOCA would not be in the practice of passing on information to any person not associated with a respectable law enforcement agency—or so I would hope—but I would feel happier if the Secretary of State were at least to have a role, so that there is a degree of accountability for the citizen through Parliament for information passed to a third party which is a quasi-policing organisation in another country.

Tony McWalter: Does the hon. Gentleman want every police force in the whole world listed? If you accidentally missed one, for example the specialist force that deals with policing the Basque country, you would lose the opportunity of liaising with them. That surely cannot be what he wants.

David Heath: No, I do not want that, and I am sure the hon. Gentleman does not think that I do. All I am asking for is recognition that, for instance, the police forces that are members of Interpol or Europol would automatically be recognised by the Secretary of State and indeed under statute within this country.
I do not think that the amendment implies any operational difficulties. It simply provides a safeguard against information being given to a third party abroad that may not be a genuine police force or a genuine law enforcement agency, but may have some other design. In operational terms I think it will have no effect, but in safeguarding British citizens and the constitutionality of the arrangements it will have considerable import. I therefore commend the amendment to the Committee.

John Mann: The amendment hits right at one of the biggest tensions behind the Bill. How effective will SOCA be, since one person's accountability is another person's political interference? Let me illustrate that with a couple of examples from the drugs trade, which is one of the most serious organised crime threats we face in this country.
In its 2001 report on drug trafficking, the UN suggested that heroin production and trade in south-east Asia had virtually disappeared, based on evidence collated from Australia and New Zealand, where there had indeed been a dramatic reduction in the preceding two years. The UN gives no conclusions about why this happened, but people on the ground suggest that it was not because gangs had stopped heroin in Burma and Thailand. Instead, they stopped trafficking it rather expensively to fairly small markets in Australia and New Zealand, where they were well identified by the law enforcement agencies. Instead they shifted the northward to China. People on the ground suggest that there is a major and growing heroin epidemic sweeping China, which is particularly prevalent in its south. I suggest that the reason why the UN has chosen to overlook the evidence from the specialists on the ground in Thailand and Burma—whose evidence shows that consumption by the local population is not decreasing as the UN is suggesting, but is, in fact, rapidly increasing—is to do with some kind of political consideration, that of not wanting to upset China.

Bill O'Brien: Order. I draw the hon. Member's attention to the fact that we are considering information gathering outside the UK. I think we have gone a little bit wide of the point. I appreciate the hon. Member's contribution, but I ask him to contain his remarks to the narrow issue of information gathering.

John Mann: My point is this: where there is a political imperative in the intelligence provided, it can skew the criminal enforcement. What is required is a criminal enforcement agency that is sufficiently confident in its independence, ethos and culture to look at the evidence base, rather than political presumptions.
Will the drug liaison officers that we have as UK police secondments in countries such as Colombia and other drug-trafficking countries remain in their role, or will they become part of SOCA? In other words, will they report into the agency, or be part of it? In addition, does the Minister believe that there is an increasing need for a European initiative on organised crime? Should that not be the direction that SOCA takes?

Caroline Flint: We foresee drug liaison officers forming part of SOCA. Our discussions of the formation of SOCA and those people who are acting on our behalf internationally addressed the possibility that we could end up with a variety of people whose work overlapped. We want to make better sense of that the arrangements and identify individuals who will not find themselves stopping at drugs when other forms of organised crime are apparent and they should work in those areas too. Making better sense of having people posted overseas is part of our work.
It is interesting that some Members criticize what could be defined by some as the dead hand of the Home Secretary interfering in the operational workings of SOCA, whereas the amendment tabled by the hon. Member for Somerton and Frome would add to the powers of the Home Secretary. I do not see any need for the amendment and I refer the hon.  Gentleman to section 2(3)(d) of the Police Act 1997. That deals with those with whom NCIS can be involved in terms of its functions and relationships. They include: 
''any other person engaged outside the United Kingdom in the carrying on of activities similar to any carried on by the NCIS Service Authority, NCIS, a police authority, a police force, the NCS Service Authority or the National Crime Squad.'' 
In many respects, the definition in the Bill is lifted from that Act, and the arguments made in 1997 probably hold true today. It is not necessary for the Home Secretary to determine whether an overseas agency is carrying out activities that are similar to those carried out by SOCA or a United Kingdom police force. In his judgment, the director general is best qualified to do that. 
Although the hon. Gentleman referred to bounty hunters, I hope that he will give the director general and others involved in the governance of the organisation some credit for understanding which organisations and individuals would best meet the provisions of clause 3(1), which is why information is disseminated when it is relevant to 
''the prevention, detection, investigation or prosecution of offences, or . . . the reduction of crime in other ways or the mitigation of its consequences.'' 
We should keep the Bill as drafted. SOCA will be working on a day-to-day basis with police forces and law enforcement agencies in other countries. I do not understand why we should change a common practice with which there have not been particular problems. I fail to see why the agency cannot be relied on to determine whether an overseas agency meets the criteria under subsection (4)(d). I invite the hon. Gentleman to withdraw the amendment.

David Heath: I am grateful to the Minister for her comprehensive reply. She has allayed my fears a little, although I stressed throughout my remarks that I did not believe that operationally it would make the slightest difference to the activities of SOCA. I was providing a defence for the occasion on which information is given in good faith to an organisation that subsequently proved to be inappropriate for some reason. The difficulty now is that that would be entirely legal and within the definition. There could be no comeback if the body's activities were similar in any way to those of SOCA or a police force. The definition gives carte blanche, so the aggrieved citizen would have no redress in such circumstances. However, if the body involved had to be recognised by the Secretary of State, SOCA would first have the defence that the body was so recognised and thus could not be held to be unreasonable. Moreover, such a requirement would weed out any inappropriate bodies from the start—one hopes.
The hon. Member for Bassetlaw made an interesting observation about drugs liaison officers. They are integral to the fight against illegal drug importation. I am reminded of previous debates on budgets after a difficulty occurred when placing drugs liaison officers abroad. Although that may have been resolved by the two Departments in question, the difficulty lay in the fact that the Home Office had a deterrent to placing a great number of drugs liaison officers because they  were recharged on the basis of the running costs of the mission as a whole for the costs of placing a drugs liaison officer in an overseas mission . The Foreign and Commonwealth Office apportioned a part of the overall costs of the mission to the Home Office in recompense for placing a drugs liaison officer within the mission. 
That is all very well between Departments; it is almost a paper transaction. Were it to happen in the case of an organisation with its own budget, which has to then find those costs, there would be a marked deterrent to placing such officers in overseas missions. I hope that that has been resolved; I am going back four or five years to when I was examining the matter as a member of the Select Committee on Foreign Affairs, but in the case of the position in central Asia and, indeed, in the far East, the costs of placing drugs liaison officers was then a current issue. 
I do not expect the Minister to give a response now because I am sure that she does not know off the top of her head what the present situation is. However, perhaps she will consider the issue, because if drugs liaison officers are to form part of the personnel of SOCA, there could be a very large cost to the Department. She might like to clear it with the FCO before we reach that point rather than after and having it cause her significant difficulties. She has helpfully drawn my attention to the provisions of the Police Act 1997. I was not aware that a similar provision was included in it. On the basis of what she has said, I beg to ask leave to withdraw the amendment. 
Amendment, by leave, withdrawn. 
Clause 3 ordered to stand part of the Bill. 
Clause 4 ordered to stand part of the Bill.

Clause 5 - SOCA's general powers

Andrew Mitchell: I beg to move amendment No. 7, in clause 5, page 3, line 37, after 'institute', insert
'and have the conduct of any'.

Bill O'Brien: With this it will be convenient to discuss amendment No. 8, in clause 5, page 3, line 38, at end insert
'which appear to it to relate to serious organised crime'.

Andrew Mitchell: This is the second of our small points, which I hope that I can deal with expeditiously. It concerns SOCA and where it lies in the hierarchy of the police family. The amendments have the purpose of clarifying the relationship between SOCA and police forces so as to ensure adequate liaison between them on questions of priority and operational matters.
Amendment No. 8 further defines SOCA's position by stating that it can institute criminal proceedings in England and Wales only if they 
''relate to serious organised crime''.
In order to ensure adequate liaison with local police forces, our amendments seek to define more clearly the relationship. 
Key questions remain unanswered. Will SOCA augment current force operations or replace work being conducted by other forces? How will SOCA co-ordinate its work with the police? In terms of joined-up policing, that is of immense importance. 
In the Government's regulatory impact assessment, a key reason given for the establishment of SOCA is that existing agencies are not working together efficiently. The blurring of institutional responsibility means unclear lines of accountability. For example, the National Crime Squad and Her Majesty's Customs and Excise are both involved in tackling drugs and fraud against business, and that means that there is a potential for rivalry as well as capability gaps and opportunities being overlooked. That is what it says in the RIA. 
That logic could be applied to the establishment of SOCA if clear lines of communication and responsibility are not established. Some forces, particularly the Metropolitan force, deal with serious organised crime, because their community crime activity is linked to serious organised crime networks at a higher national intelligence model level. SOCA must work as a partner with those forces to avoid duplication of activity and to ensure that what I have already referred to as blue-on-blue incidents do not occur. If SOCA were to become involved in an investigation without consulting the local force, it could have negative repercussions in particular communities. Liaison with local forces is vital if SOCA is to avoid creating frictions and disrupting communities. 
We seek the Minister's assurance that those points are addressed in the clause or elsewhere in the Bill.

Dominic Grieve: I hope that the Minister will also be able to amplify a little the relationship between SOCA and the Crown Prosecution Service. The words ''institute proceedings'' are rather loose. They range from charging somebody to carrying out a prosecution itself . I do not believe that that is what is intended, because if it is, it runs contrary to the entire trend of the past 10 years of ensuring that prosecutions are in the hands of the CPS or, as is the case under the Commissioners for Revenue and Customs Bill, which is currently going through the House, of actually removing prosecution from another enforcement authority. I hope that the Minister can reassure us that SOCA will have no role in the conduct of prosecutions that result from its investigations.

David Cairns: My point may be covered in clause 23(3) in relation to Scotland, but it follows on from what the hon. Member for Beaconsfield (Mr. Grieve) was saying. I am curious as to why the ability to institute criminal powers applies in England, in Wales and in Northern Ireland, but in Scotland SOCA must report matters to the procurator fiscal. Why is there a distinction?

Caroline Flint: We oppose the amendments because we believe that they will create legislation that will do exactly what the hon. Member for Beaconsfield does not want it to do.

Dominic Grieve: The amendments are probing.

Caroline Flint: I am glad that we agree on that. The answer to the hon. Gentleman's probing question is that we are not seeking to overturn the role of the CPS in these proceedings. We do not want SOCA to be able to conduct its own prosecutions, but we entirely share the belief that we need to strengthen the working relationship between investigators and prosecutors. Pilots of such closer working in which the CPS provided early advice to the police and took over the responsibility for charging defendants resulted in a 15 per cent. improvement in conviction rates and an increase in guilty pleas at first hearing to 30 per cent.

Dominic Grieve: I am pleased to hear the Minister say that. She may be coming to this, but perhaps she will also explain how she envisages the CPS and SOCA working together. I would expect the CPS to work with SOCA exactly as it works with the police. Perhaps she will confirm whether my ideas are correct, in which case CPS personnel actually sit in with SOCA on interviews if those interviews are conducted by SOCA for the purpose of deciding whether material has been gathered on which one can prosecute.

Caroline Flint: We are looking for a closer working relationship. As was mentioned today, my right hon. and learned Friend the Attorney-General talked on the radio this morning about the importance of such a relationship to the success of SOCA. We also hope to use the powers in part 2 to make Queen's evidence statutory, as disclosure of these issues is very important in getting to the criminals who are causing the most problems in our community. We do not believe, as I said, that putting prosecutors and investigators into the same agency would compromise the independence of both groups, but in order to strengthen the integrity of the prosecution process in, say, Customs and Excise cases, we are placing the Revenue and Customs Prosecution Office on an independent statutory footing.
Both the RCPO and the CPS will support the work of SOCA. As I said, we are working with the Attorney-General to see how we can establish a cadre of dedicated specialist prosecutors who will work alongside SOCA officers. At the end of the day, however, they will be answerable to the Director of Public Prosecutions, and the RCPO is answerable to the Attorney-General.

Dominic Grieve: The Minister has raised another possibility, which I confess I had not thought about. I expected that SOCA would link in with the CPS, as the police do. The Minister now tells the Committee that there might be circumstances in which SOCA works with the Revenue prosecutors. I understand the logic of that for SOCA's work, but I am starting to have slight anxieties that that illustrates the blurring of relationships. We know that Customs and Excise, for whom I used to prosecute, got into difficulty precisely  when it started to carry out major joint operations with the police. The lines of accountability were blurred. The Minister might be well advised to decide that SOCA should work solely with a single prosecuting authority.

Caroline Flint: The issue that the hon. Gentleman raises is one reason for our placing the Revenue and Customs Prosecution Office on an independent statutory footing; the intention is to create that distance. However, we perceive a possible role for the RCPO and the CPS to support the work of SOCA. We are not minded to change our view on that.
We envisage that, while the CPS will be answerable to the Director of Public Prosecutions and the RCPO prosecutors to the Director of Revenue and Customs Prosecutions, some of those individuals could be co-located with SOCA staff so that they would be on hand to provide comprehensive legal advice throughout an investigation and take responsibility for charging suspects. I hope that that answers some of the hon. Gentleman's points about what currently happens at police force level and the close working relationship between the police and the CPS. I am happy to write to him about that, seeking advice from the Attorney-General. This is one area where we are working on how things will operate in practice.

David Heath: I see a great deal of sense in what the Minister says about co-location. I understand that there will be circumstances—to return to our earlier discussion—in which SOCA investigations reveal, inter alia, revenue offences, which, the commissioners having given permission for the investigation to proceed, should logically be prosecuted by Revenue prosecutors. What I do not yet understand is why the clause states that SOCA itself may institute criminal proceedings in England, Wales and Northern Ireland, when everything that the Minister has said apart from that appears to suggest that it is not SOCA that will institute criminal proceedings, but rather the co-located special prosecutors that the Attorney-General is going to great lengths to put in place.

Caroline Flint: As I have said, it is fair to say that SOCA has a role in instituting criminal proceedings, with the caveat concerning the role of the CPS and the Revenue and Customs prosecuting officers. SOCA will be involved in pursuing criminals and will be looking to have them arrested and charged. The consequence of the hon. Gentleman's point of view would be almost to divorce SOCA from involvement to that extent. I have tried to make it clear that amending the clause to include provision to
''have the conduct of any'' 
criminal proceedings would much more clearly define a prosecution role for it within the organisation.

David Heath: I agree, which is why I should not support the Conservative amendments, although I assume that they are tabled for probing purposes. I do not agree with the Minister, though, that it is obvious that SOCA should have the power to initiate proceedings. That is quite separate from the investigative process, and the hon. Member for  Greenock and Inverclyde (David Cairns) was right when he said that there is a direct analogy between handing the case to the procurator fiscal in Scotland and handing it to the DPP or the Revenue prosecutors in England and Wales.

Caroline Flint: It may be necessary on occasion for SOCA officers to charge a suspect in exceptional circumstances, if they are up against the PACE clock. We view those as exceptional circumstances, but it is clear that the clause does not give SOCA itself a prosecutory role.

Dominic Grieve: I am sure that this can be cleared up, and I do not want to pick a quarrel when probably we are worrying about nothing. However, it is clear to me and probably to the Minister and the Committee that decisions on prosecution and above all on the continuation of prosecutions must be made by a prosecuting authority, not by SOCA. SOCA may have an input and express a view, but that is it.
We have in the recent past been moving towards involving the prosecution authorities at the charging stage, so that the decision is not subsequently rescinded when they come to look at the papers. That is a matter of involving the prosecuting authority with SOCA. What we do not want to end up with is SOCA's own tame prosecutors, lifted from the CPS and Customs and Excise, who take decisions without reference to the prosecution authorities. A letter from the Attorney-General to the Committee would be useful in providing the necessary reassurance on that point.

Caroline Flint: That is indeed what I offered a few moments ago.
In relation to the question that my hon. Friend the Member for Greenock and Inverclyde asked, subsection (2)(a) does not apply to Scotland in view of the distinctive arrangements there for investigating and prosecuting offences. Clause 23 therefore preserves the role of the Lord Advocate's Procurator Fiscal Service. Police in Scotland cannot initiate proceedings themselves. The Scottish justice system is such that only the Crown Agent's Procurator Fiscal Service can act as a public prosecution authority. We would therefore expect SOCA to act accordingly, to fit within the Scottish criminal justice systems. All the aspects of the Bill that relate to Scotland have been discussed with colleagues in Scotland, whose support we have attained.

Andrew Mitchell: We will return to what the Committee might come to know as the ''Greenock question'' about Scotland, perhaps over an amendment that we hope to move today. As has been said, the amendments in the group that we are discussing are probing amendments. Subject to the Minister's commitment to ensuring that the Attorney General writes to us, I am happy to withdraw the amendment. On the hierarchy in the police family, which I may have mistakenly mixed with the former issue, we want to ensure adequate liaison between SOCA and the police  forces on questions of priority and operational matters. We may need to return to that issue on Report, but now I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn. 
Question proposed, That the clause stand part of the Bill.

Geoffrey Clifton-Brown: At the risk of incurring the wrath of my hon. Friend the Member for Sutton Coldfield, I want to put two points to the Minister. Perhaps I have a suspicious mind, but the clause contains two powers for SOCA that I consider very general, so I would be grateful if the Minister could dispel my suspicions.
Subsection (2)(c) says that SOCA may 
''at the request of any law enforcement agency, act in support of any activities of that agency''. 
Will the Minister confirm that that applies to the UK agencies only? Much more worrying is subsection (5), which says: 
 ''SOCA may furnish such assistance as it considers appropriate in response to requests made by any government or other body''— 
presumably that means anywhere in the world— 
''exercising functions of a public nature in any country or territory outside the United Kingdom.'' 
Those are widely drawn provisions and I would like some assurance on how they might be applied. For example, my suspicious mind turns to Europe. Could a request from Europol mean SOCA being used to enforce a function of a European body? There may be other Governments with whom we might not want SOCA to co-operate too closely. SOCA might make one decision and that Government might make a different one. How are those situations to be covered?

Paul Farrelly: I, too, have some brief questions about SOCA's relationship with other police forces. In preparation for the Committee I have been leafing through an excellent book called ''Untouchables'', by Michael Gillard, who is the son of one my colleagues, who is also called Michael Gillard, of The Observer, and Laurie Flynn, who is a respected former ''World In Action'' producer. The book, which I commend to the Minister, chronicles tales of police corruption, the activities of a Metropolitan police unit called CIB3—otherwise known as the untouchables—and the resurrection of the discredited ''super grass'' system, to which we will turn later.
In the course of investigations, it is quite feasible that SOCA might come across the activities of corrupt police officers who effectively assist, by commission or omission, in the perpetration of serious organised crime. So I ask the Minister, pursuant to the drafting of clause 5(2), will SOCA have the power to investigate corrupt officers of the police force? Under clause 5(2)(b), would it have such a power only if the police force in question commenced an investigation of its own accord? Thirdly, again under clause 5(2)(b), would it have such a power only if the chief police officer of the force in question made a request and therefore, by implication, granted his or her approval for such an investigation?

Caroline Flint: In relation to the points made by the hon. Member for Cotswold (Mr. Clifton-Brown), let us not forget that SOCA will predominantly deal with level 3 crime; although, as I have said earlier in the debate, it may still have an involvement and engage with crimes at level 1 and level 2. A level 3 crime is national and international. Therefore, it is important than SOCA has the ability to work with other law enforcement bodies, in Europe and beyond, in pursuit of the aims of the organisation that we discussed earlier: to combat and defeat organised crime. It is absolutely essential that there is an indication within the Bill that SOCA may—and I emphasise ''may''—seek to work with other organisations beyond the UK. The decision is for SOCA. There is no obligation to assist. It is a matter for it to determine. The very nature of the criminal activities, however, would make it a nonsense if we were to try to restrict operational ability to use a network of contacts beyond our own shores in tackling the sort of criminal activity we have talked about, and that my hon. Friend the Member for Bassetlaw emphasised in relation to drugs. That may not be the answer the hon. Member for Cotswold wants, but I hope it makes clear our intention and desire to give SOCA the ability to carry out their work in that way.
Question put and agreed to. 
Clause 5 ordered to stand part of the Bill.